A new analysis of Companies House records reports that around a quarter of newly registered businesses in the UK legal services sector do not reach their fifth year of trading. The study, carried out by Witan Solicitors, examines company formations and subsequent status changes on the corporate register and concludes that many legal services start-ups exit the register within the first five years. The finding highlights the churn in corporate entities operating in legal services, from small practices to wider legal support businesses. It also points to the formal processes by which companies dissolve or liquidate when owners choose to close or when a business cannot continue.
The research draws on public data and looks at incorporations in the sector between January 2021 and December 2025 alongside records of companies that later ceased to trade. The headline outcome (roughly one in four not surviving beyond five years) appears in the context of Companies House procedures, which record dissolutions, strike-offs and insolvency events in the ordinary course of business administration.
How the study approached the Companies House register
Witan Solicitors reviewed the number of companies on the Companies House register associated with legal services and compared incorporations during 2021–2025 with subsequent entries showing a move towards closure. Companies House captures a range of legal status changes, including applications for voluntary strike-off, compulsory strike-off action, and different forms of liquidation and administration. These entries reflect statutory procedures rather than commercial assessments of performance.
The firm reported that approximately a quarter of new legal services companies fail to make it to a fifth anniversary, based on this comparison of incorporations and later statuses. The analysis sits within a familiar business demography framework. UK corporate records routinely show that a proportion of newly formed companies close after a few years. In the legal services sector, closures can occur for a variety of reasons, including restructuring, mergers, or decisions by owners to wind up operations.
What closure means under UK company law
A company that leaves the register does so through formal steps set out in statute. Under the Companies Act 2006, directors may apply for voluntary strike-off when a company stops trading and meets the criteria, leading to dissolution after notice periods. Companies House can also begin compulsory strike-off when a company fails to file accounts or confirmation statements. Where a company is insolvent—unable to pay its debts—closure may occur through a creditors’ voluntary liquidation or a court-ordered winding up under the Insolvency Act 1986.
These processes are administrative and legal mechanisms to bring a company’s affairs to an end. They do not by themselves explain commercial causes. The Companies House record provides a verifiable trail of incorporation, filing history and status, forming the basis for analyses like the one reported. It does not typically include qualitative reasons for closure decisions.
Who counts as a “legal services” company
The legal services sector in Companies House data can include a variety of corporate forms and activities. This may range from solicitors’ practices set up as limited companies or limited liability partnerships (LLPs), to firms offering specialist services such as probate support, legal consultancy, or ancillary legal technology. While LLPs register at Companies House, some providers trade as partnerships or sole traders and do not appear on the corporate register. Sole practitioner solicitors authorised by the Solicitors Regulation Authority (SRA), for example, may not be companies.
This means the findings describe outcomes for incorporated entities within the legal services category, not the entire universe of legal service providers. The study’s figure relates to what is recorded on the corporate register and should be read in that frame: it tracks the life cycle of companies, not regulators’ records of authorised practices by legal profession regulators.
Regulatory authorisation and corporate registration
In England and Wales, law firms that carry out reserved legal activities must be authorised by a legal services regulator under the Legal Services Act 2007. The SRA regulates most solicitors’ firms. Other regulators include the Council for Licensed Conveyancers, the Bar Standards Board for barristers’ entities, and CILEX Regulation for chartered legal executives. Authorisation focuses on professional conduct, client protection, and systems of governance.
Companies House registration serves a different purpose. It creates a legal entity for business and sets reporting and filing duties under company law, such as annual accounts and confirmation statements. A company can exist on the register without being authorised to conduct reserved legal activities, and an authorised law firm can operate through a range of structures. The two systems intersect where an authorised law firm also operates as a company or LLP, but they have distinct legal duties and objectives.
Business survival and statutory reporting
Survival rates are a feature of business demography across sectors. Companies House maintains public records of all incorporations, changes, and endpoints through dissolution or liquidation. The public can search filings, track directors, and check compliance with statutory reporting. The register also shows periods of dormancy, changes in ownership, and name changes. None of these events necessarily indicate financial distress; many occur as part of routine corporate housekeeping or restructuring.
Insolvency procedures are handled under the Insolvency Act 1986 and related rules. Where a legal services company enters administration or liquidation, an insolvency practitioner manages asset realisation and distributions according to statutory order. Where directors pursue a solvent closure, they may use a members’ voluntary liquidation if the company can pay its debts in full, or opt for a voluntary strike-off where appropriate. Each route carries particular legal consequences and notices on the register.
How the findings fit with sector structure
The legal services sector includes a mix of start-ups, spin-outs, and established businesses, not all of which provide reserved services. Some companies offer unreserved services such as will writing in England and Wales, which falls outside the list of reserved legal activities. Others focus on legal process outsourcing or technology. These business models enter and exit the register at different rates depending on market conditions and internal decisions.
The reported one-in-four figure aggregates across this mix. It reflects the breadth of activity captured under legal services at Companies House and the varied pathways that can lead to dissolution. Mergers and acquisitions, partner retirements, or strategic changes can all result in a corporate shell being wound up, even where services continue under a different entity or regulator authorisation remains in place.
Interpreting Companies House categories
Companies House uses standard industrial classification (SIC) codes to describe business activities at registration. Companies select these codes themselves. Over time, a company may change its SIC codes to reflect shifted activities. As a result, any analysis of a particular sector depends on how companies assign and maintain their SIC codes. This factor can influence counts of incorporations and closures attributed to “legal” activities.
Furthermore, Companies House records show legal end states for companies but do not capture all starts and stops in other structures. Traditional partnerships without LLP status and sole traders do not appear in company-level survival statistics, even if they operate in legal services. Any reading of sector survival must therefore consider the limits of the corporate register as a proxy for the entire legal services landscape.
What this means
The finding reported by Witan Solicitors indicates that, according to Companies House records, around a quarter of newly formed legal services companies do not remain on the register for five years. The data reflects statutory closures and changes in company status recorded under UK company and insolvency law. It does not change existing legal duties for companies or authorised law firms. There has been no announcement of new regulatory requirements arising from this analysis. For stakeholders, the immediate procedural significance lies in the public availability of corporate status information on the Companies House register and the established routes for formation and closure under current law.
When and where
Published on 28 January 2026 by Today’s Wills and Probate, reporting Witan Solicitors’
